The New York Lottery offers a variety of lottery games to residents of New York, including well-known games like Powerball, Mega Millions, and Lotto. Like most state lotteries in the United States, the New York Lottery has an extensive legal team to handle contractual, regulatory and litigation matters. So who exactly serves as legal counsel for the New York Lottery? Here is an overview of the key lawyers and law firms advising the New York Lottery Corporation.
The New York Lottery Corporation
The New York Lottery is operated by the New York State Gaming Commission, which oversees all gaming activities in New York. The specific entity that runs the lottery games is the New York Lottery Corporation, a public benefit corporation created by the New York legislature in 2013. The New York Lottery Corporation has a 7 member board of directors appointed by the Governor, Speaker of the Assembly and Temporary President of the Senate. The Corporation has the authority under New York law to operate and regulate lottery gaming, including vetting and licensing retailers, developing new lottery games, handling lottery ticket sales, paying out prizes, and more. Like any major state agency or corporation, the New York Lottery requires ongoing legal counsel to advise on this wide range of matters impacting its operations.
In-House Counsel
As a public corporation overseen by the New York Gaming Commission, the New York Lottery has direct access to in-house lawyers at the Gaming Commission who can provide day-to-day legal advice on lottery matters. According to the Gaming Commission’s website, its internal legal team includes:
- General Counsel
- Deputy General Counsel
- Assistant General Counsel
These in-house lawyers are able to advise the New York Lottery on pressing legal issues under tight deadlines given their direct role as counsel for the Corporation. They likely handle the majority of routine legal questions impacting the Lottery’s operations.
However, complex contractual matters, lawsuits, and specialty legal issues require outside counsel with specific expertise. The New York Lottery utilizes external law firms for these specialized legal needs.
Outside Counsel
The New York Lottery relies on a number of private law firms to supplement its in-house legal team. These external lawyers have experience in areas like gaming law, government contracting, intellectual property, and litigation. They are hired by the New York Lottery on an as-needed basis to handle specific cases and matters requiring niche legal knowledge.
Based on public records, some of the external law firms who have worked with the New York Lottery Corporation in recent years include:
Harris Beach PLLC
Harris Beach is a prominent law firm based in New York. They have an entire practice group dedicated to gaming and sweepstakes law. Harris Beach lawyers have advised the New York Lottery on gaming regulations, contract negotiations, and intellectual property matters. They have also provided legal services related to the Lottery’s advertising and marketing campaigns.
Wilson Elser Moskowitz Edelman & Dicker LLP
Wilson Elser is a national law firm with a strong presence in New York. Their attorneys have handled litigation matters on behalf of the New York Lottery Corporation, including cases involving prize payout disputes, retailer complaints, and personal injury claims. With over 150 litigators in New York alone, Wilson Elser has deep resources to handle the diverse lawsuits that may arise from the Lottery’s complex operations.
Hiscock & Barclay LLP
Hiscock & Barclay is a regional law firm based in Syracuse, NY with an office in Albany. They have provided counsel to the New York Lottery on government procurement and contracting matters. As an experienced firm working with NY state agencies, Hiscock & Barclay advises the Lottery on the legal nuances of procuring services and technology for lottery gaming.
Other External Counsel
In addition to these primary law firms, the New York Lottery works with various other attorneys and smaller law practices to handle specific legal needs as they emerge. This includes niche counsel in areas like intellectual property, taxes, compliance, bankruptcy law and more. The Lottery also utilizes local counsel in jurisdictions outside of New York when legal issues arise in other states.
The Legal Team in Action
To understand how the New York Lottery’s legal team operates in practice, it helps to look at some real-world examples:
Intellectual Property Dispute
In 2019, the New York Lottery became embroiled in a trademark infringement lawsuit regarding the game name “Cash Pop.” A Michigan company claimed the Lottery infringed on their existing trademark for a bingo game also called “Cash Pop.” The New York Lottery utilized outside IP counsel from Harris Beach to defend against the lawsuit and negotiate a settlement allowing both parties to continue using the “Cash Pop” name under certain conditions.
False Advertising Lawsuit
In 2018, a player filed a lawsuit against the New York Lottery claiming a scratch-off game did not have the odds advertised. The Lottery enlisted litigators from Wilson Elser to defend the case. After a year-long legal battle, Wilson Elser was able to have the lawsuit dismissed in a victory for the Lottery.
Retailer Dispute
When a lottery retailer sued the New York Lottery in 2016 over alleged commissions owed, the Lottery turned to Hiscock & Barclay for representation in the contract dispute. The firm was able to resolve the case through negotiation, saving the Lottery the expense of prolonged litigation.
Oversight of the Legal Team
The New York Lottery’s internal legal department oversees the work performed by external counsel. The General Counsel and legal leadership team manage the budget for legal expenses and decide when it is prudent to hire outside lawyers for a particular case. They negotiate payment structures and rates with law firms to ensure diligent representation at a reasonable cost. Ongoing oversight is critical to keep legal spending under control while still having access to top-tier legal talent.
The Board of Directors for the New York Lottery Corporation also plays an oversight role when it comes to legal services. As the governing body for the Lottery, the Board helps shape high-level legal strategy and weighs in on significant law-related decisions that may impact the integrity or public perception of the Lottery. Board members with legal backgrounds, such as the current Chair who is a former federal prosecutor, take particular interest in monitoring the Lottery’s legal matters.
Legal Duties and Responsibilities
The New York Lottery’s legal team, whether in-house or external counsel, tackles a wide array of legal matters including:
- Negotiating and drafting contracts with vendors, retailers, advertising agencies and other third-party partners
- Navigating strict regulatory and licensing requirements imposed by the state gaming commission
- Ensuring transparency and security around lottery gaming to maintain public trust
- Protecting intellectual property related to brand names, logos and lottery games
- Defending against lawsuits from players, retailers or other aggrieved parties
- Overseeing lottery ticket sales, claims and prize payouts to minimize legal risk
- Providing legal review of proposed new lottery games
- Advising on risk management, compliance and minimizing liability
- Responding to open records requests and subpoenas for information
- Recommending updates to existing lottery statutes, rules and regulations
Handling this diverse array of legal issues on behalf of a complex, highly regulated business requires sophisticated counsel with experience spanning corporate, regulatory, intellectual property, litigation and other legal fields.
Core Legal Priorities
Based on the nature of the legal issues facing the New York Lottery Corporation, there appear to be four core priorities guiding the focus of the legal team:
Integrity
Ensuring total integrity around lottery operations is paramount. This includes providing transparent disclosures, maintaining rigorous security protocols, and preventing fraud or rigging. The legal team plays a central role in protecting the Lottery’s reputation.
Compliance
The Lottery must comply with reams of state and federal regulations governing gaming activities. Their lawyers are constantly reviewing proposed actions to guarantee they adhere to legal requirements. Severe penalties can result from non-compliance.
Risk Mitigation
There are myriad risks inherent in running lottery games at scale. Lawyers work to minimize risks around information security, false advertising, prize payouts, retailer disputes and liability claims. Proactive legal risk management is crucial.
Revenue Generation
As a revenue-generating enterprise, the Lottery naturally wants to maximize proceeds for educational programs supported by the state. The legal team plays a key part in enabling innovative new games and partnerships to grow revenues responsibly and sustainably.
Balancing Multiple Interests
Serving as counsel for the New York Lottery requires balancing the interests of multiple stakeholders:
Players
Lottery lawyers must ensure the terms of games are fair and transparent to players. This fosters trust amongst consumers choosing to participate in the lottery.
Retailers
Retail partners selling lottery tickets expect their interests to be represented in contract negotiations and disputes with the Lottery.
Government
As a state agency, the Lottery has a duty to execute its mission ethically in service of citizens. Oversight bodies like the State Legislature also factor into legal decisions.
Employees
In-house lawyers look out for the legal rights and responsibilities of the Lottery’s hundreds of employees.
Vendors
Third-party suppliers want assurance of fair contracts when bidding to service aspects of the Lottery like advertising, gaming systems and customer support.
A delicate balancing act is required to accommodate all parties invested in the Lottery’s success from a legal perspective.
Budgeting for Legal Expenses
The New York Lottery Corporation must budget significant funds for legal expenses each year given the scope of its activities. Some of the major items factored into the legal budget include:
- Salaries for in-house legal staff
- Payments to outside law firms for services
- Litigation-related costs like case filings, court reporters, travel, etc.
- E-discovery costs for legal document collection/review
- Legal research subscription fees
- Memberships in professional legal organizations
- Legal department overhead like office space, supplies and equipment
- Legal insurance policies (errors & omissions, etc.)
- Legal education and training
To control legal spending, the Lottery maintains clear billing guidelines for outside counsel and leverages alternative fee arrangements where prudent. Legal expenses are carefully tracked and analyzed to identify opportunities to improve cost efficiency.
According to the Lottery’s 2019-2020 annual report, total administrative operating expenses (including legal) amounted to $84.1 million out of $3.47 billion in total revenue. So legal expenses likely represent around 2-3% of total revenue, proportional to the Lottery’s massive scale.
Revenue Generated for State Education Programs
After accounting for prizes, commissions and expenses, the New York Lottery generates significant excess revenue for educational programs across the state.
| Fiscal Year | Revenue Generated (Millions) |
|---|---|
| 2018-2019 | $3,273 |
| 2019-2020 | $3,470 |
| 2020-2021 | $3,594 |
| 2021-2022 | $3,808 |
As shown above, the Lottery has produced over $3 billion in annual revenues for the state in recent years. These funds support education initiatives like classroom instruction, after-school programs, scholarships and school construction projects.
While legal expenses make up a small fraction of total costs, the legal team plays an important role in enabling the New York Lottery to operate successfully and continue generating massive transfers of revenue back to key education programs across the state.
Conclusion
The New York Lottery utilizes a combination of knowledgeable in-house counsel and specialized outside law firms to expertly handle its wide-ranging legal needs. This experienced legal team manages issues like intellectual property disputes, litigation defense, government regulation, contract negotiations and more to enable ethically run, revenue-generating lottery operations. The Lottery’s legal department must balance multiple stakeholder interests while protecting the integrity of lottery gaming and supporting valuable state education initiatives through excess revenues. With the guidance of skilled legal counsel, the New York Lottery continues its mission of providing entertaining lottery games for New Yorkers while responsibly generating billions for schools and students.
